-
Section 3. 2009 Annual Meeting of the World Economic Forum
- The Chinese University of Hong Kong Press
- Chapter
- Additional Information
2 0 0 9 A N N U A L M E E T I N G O F T H E W O R L D E C O N O M I C F O R U M MeetingTheChallengesEN_FA02_17Dec2013.indd 55 MeetingTheChallengesEN_FA02_17Dec2013.indd 55 19/12/13 11:25 AM 19/12/13 11:25 AM “Past experience shows that in times of crisis it is all the more important to stick to a policy of opening-up and cooperation.” —Wen Jiabao, 2009 MeetingTheChallengesEN_FA02_17Dec2013.indd 56 MeetingTheChallengesEN_FA02_17Dec2013.indd 56 19/12/13 11:25 AM 19/12/13 11:25 AM [3.215.77.96] Project MUSE (2024-03-29 11:54 GMT) 57 BACKGROUND The following speech was delivered by Premier Wen Jiabao to the 2009 World Economic Forum Annual Meeting and marks the first time that China’s package of plans for countering the impact of the international financial crisis has been systematically discussed in the global arena. From 27 January to 2 February 2009, Premier Wen made a series of official visits to Switzerland , Germany, Spain, the United Kingdom, and the European Union headquarters. He also attended the 2009 Annual Meeting of the World Economic Forum, which was held in Davos, Switzerland. During that time, the international financial crisis that was triggered by the U.S. subprime mortgage crisis was already in full swing. The world economy, plunging into its most serious difficulties since the Great Depression of the 1930s, was on the verge of collapse. Panic, pessimism, and anxiety were spreading. There was an urgent need to merge wisdom, courage, and strength to overcome the crisis. Premier Wen’s visit attracted wide international MeetingTheChallengesEN_FA02_17Dec2013.indd 57 MeetingTheChallengesEN_FA02_17Dec2013.indd 57 19/12/13 11:25 AM 19/12/13 11:25 AM MEETING THE CHALLENGES 58 attention. At a time when the world was paying greater attention to China, Premier Wen’s speech emphatically placed China at the focus of global attention. While the international financial crisis plunged the United States and the European economies into recession, it also dealt a heavy blow to the Chinese economy. After September 2008, China’s economy faced mounting downward pressures. External demand had contracted considerably, investment growth had slowed down, demand for energy and raw materials fell dramatically, enterprises faced operational difficulties, fiscal revenue declined, the stock market was in a slump, the numbers of laid-off and jobless workers had risen, and a large number of migrant workers had returned home. In the fourth quarter of 2008, China’s economic growth slowed to 7.6 percent, which represented a reduction of three percentage points from the previous three quarters. However, the Chinese government promptly took initiative and implemented forceful and targeted measures to tackle the negative economic impacts of the crisis. Following a timely mid-year adjustment of its macroeconomic policy, the Chinese government decisively changed its prudent fiscal policy into a proactive fiscal policy and shifted from a tight monetary policy towards one that is moderately relaxed. The implementation of enhanced and targeted macro regulation was accompanied by a host of policy measures in the fields of finance, taxation, banking, foreign trade, and investment that was used to stimulate economic growth. Other measures included substantially raising the export rebate rate; lowering the benchmark deposit, lending rates, and the required reserve ratio of financial institutions; canceling the personal income tax on interest from deposits; cutting the securities transaction stamp tax; reducing taxes and fees for housing transactions ; and increasing credit support for small and medium-sized enterprises . MeetingTheChallengesEN_FA02_17Dec2013.indd 58 MeetingTheChallengesEN_FA02_17Dec2013.indd 58 19/12/13 11:25 AM 19/12/13 11:25 AM [3.215.77.96] Project MUSE (2024-03-29 11:54 GMT) 2009 ANNUAL MEETING OF THE WORLD ECONOMIC FORUM 59 In particular, the Chinese government swiftly introduced and implemented ten measures to further expand demand and to promote economic growth. Additional policy measures were also introduced, such as promoting economic growth through the development of the financial sector, formulating and implementing a plan for revitalizing key industries, facilitating the healthy development of the light textile industries, increasing subsidies for the purchase of agricultural machinery and tools, and promoting the sound development of the property market. As a result, China rapidly put in place a comprehensive system of policies to counter the international financial crisis. During his visit to the Zhongguancun Science and Technology Park in Beijing at the end of 2008, Premier Wen stated that countering the crisis and promoting economic...